More companies in a widening range of industries have turned to PMOs (program management offices) to manage multiple, complex initiatives with wide-ranging implications in cost, human resources and impact on customer relationships. However, many of these companies have found that internal implementation of a PMO is a costly learning exercise that delays or derails the promised benefits.

The goal of the outsourced PMO is to help companies improve the execution, and ultimately the profitability of company projects by establishing project execution and reporting standards to enable better decision-making. These initiatives may include staff utilization, on-boarding and off-boarding employees and contractors, timesheet process management, expense management, project setup and monitoring. However, even successful PMO outsourcing initiatives must be steered clear of the pitfalls that make achieving project execution, cost savings and improved customer relationships harder, or even impossible, to obtain.

The Pitfalls of the Outsourced PMO

The range of results achieved by companies that have enlisted a provider to implement an outsourced (or virtual) PMO varies wildly. Here are four of the chief causes of frustration and failure:

1. The Technology becomes its Own Mission

Too often, outside consultants are advocates for a particular enterprise or project-focused technology solution that may or may not be the best fit for the company’s aims.

2. The PMO Function is Poorly Conceived

Another commonly noted misstep is a PMO that doesn’t function optimally due to poor up-front planning. This can be the result of the function serving the tools (as in the earlier technology example) or a misunderstanding of what a PMO is supposed to do in the first place.

3. Management Isn’t on Board

Without leadership buy-in and a clear picture of return on investment (ROI), the PMO is fighting an uphill battle.

4. No Standards for Value Delivery

According to a PMI/CIO Magazine Survey, 42% of PMOs do not track metrics within the first year of their establishment. Additionally, 23% do not track in the second year and 22% do not track even in the fifth year.

We cover all these topics in more detail in our newly released executive brief, which can be downloaded here